There has been lots of speculation about BRICs countries working to develop a new trading currency, to enable trade without the reliance on the US dollar. There’s also talk that maybe this new currency will be backed by gold? Many suggest this will be a challenge to western fiat money. There’s a suggestion that such currencies will lose value against such a strong currency, backed by a physical commodity. This week Phil talks to Steve about this commodity obsession and why this idea wouldn’t wor...
Aug 16, 2023•33 min•Season 1Ep. 364
QE was big news before the pandemic. Then, as governments issued bailouts to keep us at home, central banks went into overdrive, buying up the mushrooming bond issuance from government. In some ways, it was a sort of People’s QE, because the money was finding its way directly into people’s bank accounts. So, how does that compare to the QE before we all got ill? And is the pandemic-style QE at all responsible for the rise in inflation we’ve experienced since? Phil asks Steve if there are lessons...
Aug 09, 2023•35 min•Season 1Ep. 363
Phil and Steve return to the well-worn path of talking about house prices. Why? Because, despite the downturn during the pandemic, followed by sharp rises in interest rates by central banks around the world, house prices are again edging up. Clearly, nothing can stop the march higher, even though an increasing proportion of the population simply can’t afford to enter the property market. So, we know who the losers are. Ut who is winning? And what can government policy do to build a more affordab...
Aug 02, 2023•35 min•Season 1Ep. 362
The UK is recovering slower than just about anyone from the pandemic. The UK’s GDP is flat compared to where it was four years ago, whereas most countries have recovered from the pandemic, and then some. Inflation rose faster than most comparable economies and is taking longer to come down. So why is the UK struggling so much. This week Phil asks Steve the obvious question, has Brexit got something to do with it? And what role does a growing trade deficit play in the tardiness of Britain’s recov...
Jul 26, 2023•42 min•Season 1Ep. 361
One of the biggest problems Britain faces is that so much of the wealth is concentrated in the southeast. And it only seems to be getting worse. The country has shifted from a Prime Minister who promised to level-up the economy, to a fiscal conservative who wants to cut government spending and reduce real wages, meaning there is less spending power outside London. Phil asks Steve if there is an easy solution to the economic destruction London is rendering on the rest of the UK? Hosted on Acast. ...
Jul 19, 2023•34 min•Season 1Ep. 360
The UK Chancellor and the Bank of England Governor have called for increases in productivity as a way of helping to brig down inflation. So, not only should workers expect wages to fall in real terms, people should also be doing more per hour worked. Are they dreaming? This week, Steve Keen says you can’t increase output without increasing investment in technology and machinery, something the Chancellor is less keen to do. So long as the UK is investment starved, you’ll never see a rise in produ...
Jul 12, 2023•35 min•Season 1Ep. 359
We last had a financial crisis in 2008 (ignoring the pandemic years), and if we’re not in another crisis now, we’re well on the way to it, with mortgages rising, taxes increasing and the price of everything continuing to rise. Your spending power is being hit in three directions. But, isn’t that what central banks want? So we spend less and inflation comes down, theoretically. Yet the banks, who might not be to blame this time, are now feeling the hurt. In fact, they stand to gain from rising in...
Jul 05, 2023•35 min•Season 1Ep. 358
The UK economy is ready for a major downturn. In part it’s down to supply chain difficulties, thanks to COVID, the war, the great resignation, sickness and, let’s not forget, Brexit. Originally central banks recognised this and said the inflation was transitory and we just needed to ride it out. Since then, they’ve gone back to their conventional thinking that inflation can only be fought with interest rates. The higher the better it seems. But Prof Steve Keen tells Phil Dobbie that it is the wo...
Jun 28, 2023•37 min•Season 1Ep. 357
If we ignore the flagrant human rights abuses, there’s a lot to admire about China. There economy has grown at an incredibly rate whilst the West has been stagnating. So, what’s their secret? Phil quotes Mervyn King, former BoE governor, who spoke to a Chinese central banker and asked that very question. Hear what he said, and what Steve Keen thinks is behind China’s growth, in this week’s podcast. Hosted on Acast. See acast.com/privacy for more information....
Jun 21, 2023•38 min•Season 1Ep. 356
Older Brits will be familiar with Bruce Forsythe’s Generation. Today everyone is playing the Generation Game, but the young are the one’s losing out. They are steeped in debt and faced with the prospect of progressively unaffordable housing. Many of the over 60s meanwhile, have accrued healthy amounts of assets. As Phil Dobbie discusses with Steve Keen much of this we4alth will be passed on, but not everyone will benefit. So intergenerational wealth is adding to the rich-poor gap. Hosted on Acas...
Jun 14, 2023•34 min•Season 1Ep. 355
We know we don’t pay a fair price for energy. Energy companies are making a mint because they extract the energy without worrying about most of the externalities – like the impact they are having on the ecology of our planet. But what if they did pay a fair price? Could the economy survive? Phil Dobbie asks Steve Keen if we can fix our problems with the pricing mechanism if there was a way to accurately cost energy. Hosted on Acast. See acast.com/privacy for more information....
Jun 07, 2023•33 min•Season 1Ep. 354
There is about £2.5 - 3 trillion of assets in UK private pension schemes. Through the tax system we are heavily incentivised to put money into our pension plans. So, what’s wrong with that? That money is supposedly used to invest in businesses, so it helps the economy grow. If only. This week Steve Keen talks to Phil Dobbie about the orle pensions have had in the financialisaton of the economy. He believes a better state funded system would be a healthier approach, but don’t count on it happenin...
May 31, 2023•40 min•Season 1Ep. 353
Part of the problem with the global economy is that nobody has a plan, except perhaps the Chinese Communist Party. Elsewhere politicians lurch from one crisis to another, and any long-term planning is simply about how they can win the next election, and that often means kowtowing to the powerful, who well might be funding their election campaign. This week Steve talks through the work of Positive Money, who do have a plan about how to transform the economy, ignoring vested interests, throwing aw...
May 24, 2023•39 min•Season 1Ep. 352
Central banks seem to be in a rush to offer digital currencies, but why? Conspiracy theories point to China, and visions of private bank accounts monitored by the state to counter the hidden transactions of cryptocurrencies. But the proposition for crypto is very different. Central banks aren’t offering a new investment opportunity, they are talking about a transactional currency. But how does that differ to our sovereign currencies for which most money is stored in a digital form. The case for ...
May 17, 2023•34 min•Season 1Ep. 351
New Keynesian economists have accepted that their HANK model, which models the behaviour of one representative agent, doesn’t explain the outcomes on different income groups. As we know, the latest rate rises are having a more profound impact on income variation. Steve says their models don’t work because they don’t realise the distribution of income. The answer , according to the new Keynsians, is to assume a HANK model, which allows for heterogeneity, with different consumer groups behaving in...
May 10, 2023•39 min•Season 1Ep. 350
Reaching net zero – is it doable, or is it just a pipe dream? In podcasts recently Steve Keen has expressed thoughts that we are already too late to avoid catastrophic climate change. But this week, Harald Desing, a scientist at Empa, the Swiss Federal Laboratories for Materials Science and Technology, gives a more positive spin on the outlook. He reckons, if we focused on the task, accepted there would have to be an increased usage in fossil fuels in the short term, we should be able to get to ...
May 03, 2023•42 min•Season 1Ep. 349
Nobody wins when rates rise. Central banks might argue that everybody wins, because they are using these rises as the blunt instrument to knock down inflation. But the wealthy lose out because asset prices take a hammering, and the working poor become of the unworking even-poorer as the economic slowdown leads to rising unemployment. But it’s clear those on lower incomes suffer the most. This week Phil asks Steve if there’s a way for central banks to reduce the inequality as they seek to tame in...
Apr 26, 2023•36 min•Season 1Ep. 348
There is nothing or contentious that immigration, it seems. In the UK there’s a swathe of the population that don’t like foreigners very much, unless they are serving than fish and chips in Torremolinos. Others will deny being xenophobic but argue that Britain is full and there’s no room for anybody else. A more rationale argument might be that too much immigration happening too quickly can have societal and economic impacts – but what is too much and too quickly? This week Phil Dobbie and Steve...
Apr 19, 2023•39 min•Season 1Ep. 347
Not so long ago the world was worried about deflation, supposedly driven by low-cost imports from China, but also a stagnating economy driven by high levels of private debt. Now central banks are trying their hardest to bring down inflation, fearing without their expertise it will spiral out of control. So, will it? What caused it? And can we live with it? This week Phil and Steve look at the pros and cons of inflation and discuss whether it is here to stay. Hosted on Acast. See acast.com/privac...
Apr 12, 2023•31 min•Season 1Ep. 346
Silicon Valley Bank collapsed last month because there was a run on the bank and they didn’t have the assets to cover their customers deposits. They were trading insolvent, in other words, even though they had switched the money deposited into US Treasuries, supposedly the safest investment on earth. But they bought before the price of Treasuries came crashing down, as bond yields went up. This week Phil asks Steve if bonds now behave just like shares, and how much of the recent volatility is th...
Apr 05, 2023•38 min•Season 1Ep. 345
After the Great Depression a bunch of economists got together to hatch a plan to stop future runs on banks. The plan called for banks to only accept demand deposits “subject to a 100% reserve requirement in in lawful money and/or deposits with the Reserve Banks”. Some read that as an end to fractional reserve banking but, as Steve Keen explains this week, fractional reserve banking doesn’t really exist because banks don’t lend out deposits. And whilst some good came out of the Chicago Plan, he r...
Mar 29, 2023•33 min•Season 1Ep. 344
If the west decouples itself from China and other autocratic regimes, just as we have done, to an extent with Russia, what does that mean for international trade? What does it mean for international investment if we exclude money from countries that are growing faster than we are? This week’s discussion follows a question from Pola, a listener, who asked, “Any chance you could talk about foreign debts and how this works? Also what impacts are likely to occur as BRICS etc move to payments in thei...
Mar 22, 2023•38 min•Season 1Ep. 343
The collapse of Silicon Valley Bank last week can be put down to two things – first a management team that clearly ignored the falling value of the assets they held, and second the fact that the Fed was doing its best to make those assets fall even more\. The end result is hardly a surprise when you look at the numbers. In fact Frances Coppola predicted as much after the collapse of Silvergate Capital. This week Phil and Steve look at what went wrong and ask whether it could happen to other bank...
Mar 15, 2023•36 min•Season 1Ep. 342
At the end of this week’s mega-long episode of the Debunking Economics Podcast Steve Keen admits he longer sees Australian house prices as the most important issue on the planet. But it, along with private schools, continues to occupy dinner party conversations in many Australian households. So, with prices now falling, will they spiral down further as the RBA continues to lift interest rates. Or will they, as often seems to happen will they slow for a while than pick back up as inflation slows?...
Mar 08, 2023•53 min•Season 1Ep. 341
This week on Debunking Economics Phil and Steve are joined by Richard McGahey, author of a new book “Unequal Cities: Overcoming anti-urban bias to reduce inequality in the United States”. One of the problems the US faces is that cities, by and large, are self-funded, with little in the way of federal or state support, beyond minimal welfare programmes. And cities compete with each other to survive. As Steve points out, being self-sufficient within an organism is not how organisms function proper...
Mar 01, 2023•42 min•Season 1Ep. 340
They are pushing up interest rates thew world over because monetary theory dictates that this is the way to bring down inflation. But not so long ago those same banks were arguing that inflation was only transitory and there was no need to lift rates. So, what changed? And why isn’t it working. Inflation is coming down very slowly and the wage pressures they seek to ease, by making people lose their jobs, isn’t working. The labour market is as tight as ever. This week Phil asks Steve what centra...
Feb 22, 2023•37 min•Season 1Ep. 339
The UK is gripped by strikes right now, but they are not the only ones. All over the world public and private sector workers are taking action as their salaries fail to keep up with inflation. Central banks are urging caution, fearing a wage spiral could push prices higher. This week Phil Dobbie and Steve Keen discuss the theory behind wage setting – a principle that someone sees chief executives earning a ridiculous multiple of the take-home pay of their workers. So, how are wages arrived at? O...
Feb 15, 2023•37 min•Season 1Ep. 338
Over the weekend Liz Truss was singing her own praises, with a front-page article in the UK’s Sunday Telegraph. She is known, of course, for being the UK’s shortest-term Prime Minister after her plans for tax cuts (mainly for the wealthy) sent finance markets into a spin. In particular, bond prices collapsed and saw pension funds running low on collateral, forcing the Bank of England to step in. But was she wrong? Former Chancellor George Osborne said she made the mistake of cutting taxes withou...
Feb 08, 2023•38 min•Season 1Ep. 337
For most of us liquidity is an easy concept to understand. Have we got enough cash to pay our bills? For small businesses it is a simple case of managing your cashflow and ensuring your cash on hand exceeds your current liabilities. For banks it’s a mix of ensuring you have the capital to meet demands from depositors, as well as the reserves to meet interbank transfers. To ensure we have liquidity we ensure there is a buffer, to keep us out of trouble. But does that buffer keep us using money pr...
Feb 01, 2023•44 min•Season 1Ep. 336
It would be a bold prediction to say that capitalism is on the way out. Nor should it be. It has provided growth and innovation for the global economy, but has it become too laissez faire? Phil asks Steve whether we need to return to the mixed-economy many of us grew up with – when governments controlled large essential sectors, such as transport and utilities, and imposed tighter regulations on those sectors open to private sector involvement. Are we seeing how unfettered capitalism creates mor...
Jan 25, 2023•36 min•Season 1Ep. 335
